The retreat from globalisation

Tariffs and other barriers are going up between the USA and China, the USA and the EU, around Iran, between Japan and South Korea and between India and Pakistan over Kashmir. There is a new economic nationalism abroad.

It is also pronounced in some businesses and industries. The vehicle industry in particular is retreating to home factories under the weight of falling demand for diesel and petrol cars.

The Japanese car makers are moving more production from the EU to Japan, partly owing to a rare move to zero tariffs in their new Agreement with the EU. Ford is pulling out of European factories. If the Fiat/Chrysler/Peugeot merger goes ahead they may wish to concentrate EU production in the two home bases of Italy and France.

Globalisation is not always the right answer. Complex supply chains come about often because companies find cheaper components and raw materials from afar which they reckon they can weld into their production to cut costs. Sometimes this turns out to be a false economy. Long distance travel for components both increases travel costs and in some cases adds an additional risk of delay to supply. Too many competing suppliers may not breed good long term relationships between assembler and component maker.

There is a rival school of thought to globalisation which says working closely with a limited number of suppliers that are nearer to the main factory may produce better results. Today suppliers often have to operate full transparency with large corporate buyers, who will expect to know their costs, margin and investment rate. For certain finished products to qualify as coming from a given country for Free Trade Agreement purposes there is often a minimum total value requirement which affects how many components can be foreign sourced.

President Trump’s America first policy is designed to onshore jobs that have gone abroad. It is finding that in the current climate of industrial recession worldwide, with a particular problem in the vehicle industry, it is difficult to increase manufacturing jobs by these means. As the UK comes out of the EU we need to rebuild UK capacity to make more components for industry at home and produce more of our own food.

One of the reasons we need to get on with our exit from the EU is the opportunity it will give us to have our own trade policy, to lower our average tariff and to do a better job at promoting home produced food and goods . It has been damaging to be caught in the US/EU crossfire in the recent tariff disputes.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

87 Comments

Globalisation has been a disaster. Together with unending wars it has created mass migration, increased violence, falling living standards and massive wealth inequality. The EU is a globalist organisation and has been ruinous for Britain. Remainers are the tools of the EU and must be eradicated from political life.

Yes it has allowed corporations to grow financially so large and global to be beyond the control of their birth nation. The ones that choose to can play tax regimes around the World to their own advantage and the detriment of nations where they trade. Governments ignore this nettle to their detriment.

On the contrary, globalization has raised living standards in many countries around the world. It has been achieved in part by transferring work to those countries from the more prosperous West, causing a standstill in living standards for many in the West. That fact lies behind the rise of Trump. The wars and mass migrations you speak of are politically driven.

Agree on all counts.
The EU is a visible front for the Globalist Cabal.
It is ruinous for anyone that gets entangled in their web, and yet there are people that are so susceptible to the brainwashing they will fight to protect it.
*
I believe there are 2 kinds of people at the moment:
1/ Those that understand the agenda, and the EU end game.. and want out.
2/ Those that do not understand the agenda.

‘President Trump’s America first policy is designed to onshore jobs that have gone abroad.‘
Indeed. Hence its popularity in areas that have lost jobs because of globalisation. However, global corporations resent the change in their ability to shift production to cut manufacturing costs. Such corporations have powerful lobbies. It’s a battle between the interests of the nation state and huge transnational companies that owe no allegiance to any one country.

. . . our exit from the EU is the opportunity it will give us to have our own trade policy, to lower our average tariff. . .

See above.

Countries maybe seeing their foreign car plants close and manufacturing returning home but, somehow, I doubt JLR will be doing the same with their Austrian and Slovenian plants.

As someone here mentioned a while back; “we have reached ‘peak car’.” And unless government forces us to do otherwise, like banning the internal combustion engine and forcing us to go electric, I cannot see people giving up a perfectly serviceable vehicle for a new one. And in a consumer and credit driven economy this spells disaster.

Well said. We are still in the EU. Three departure dates by EU law broken by the Tory govt. then there is the unlimited servitude transition period. Then there is the level playing field clauses to make sure the U.K. Can only trade on the same terms as the EU, not more competitive. Hardly independent as JR claims.

Nine years in office and the Left wing Tory govt has achieved absolutely nothing. Not even to give the,selves a competitive edge over extreme left wing Labour! Left quangos heade by former Labour MPs still very much directing the agenda, left wing judiciary to skew society and culture to the left. Left wing selection producers for all public sector appoint,met where we have seen in the past few weeks it is more important to be a virtue signaler than carry out the main task/function of their role. Specifically police service who want to promote a change to pronouns and a fire brigade chief who thinks it important to change the name of fireman Sam to firefighter Sam. If she only had the same eye for detail in preventing fires and rescuing people, highlighted by an article in Con Woman yesterday. What have the Tory govt achieved? Cameron stated his greatest achievement was gay marriage! No mandate or Queens speech. But it fits in with the left wing virtue signaling agenda. Now we will pay the heavy price of the utterly mad zero carbon nonsense.

Johnson’s drive this lectionaries is on NHS, Police and education. To put these services on the same levels of funding before Tories made severe cuts while continuing mass immigration to overwhelm them! He could be better served by stopping mass immigration freeing up resources. No need for them to reform or improve service. Like local authorities this year and last given whopping hikes without any improvement to service.

Tories have had their nine year chance and overwhelmingly failed to deliver.

Dear Mark–I too reckon that will not be as easy as some people seem to think to get rid of the internal combustion engine. People will keep their much loved old petrol cars going indefinitely rather than go electric, except, re the latter, perhaps as a women’s shopping car round town. I believe that one can still, or perhaps I should say once again, buy every possible brand new part for ancient Corvettes and MG’s for instance.

Sandbach now with the lib dumbs. it does show the lack of conviction for conservatism by these turn coates. Yet in stark contrast Johnson allows Remain saboteurs back into their seats! Another U-turn by Johnson. Why would anyone vote for this party!

Con Woman today makes it clear Brexit Party must hold Tory party/Johnson to account if we are to get Brexit. Tory party cannot be trusted. It is that simple.

It was interesting that Trump was promoting a pact between Farage and Johnson yesterday. This makes sense to many Brexiteers. The BBC was furious. It claimed this is not the way things are supposed to be done. It’s intereference. It will backfire. Yet they bought the Obama ‘back of the queue’ story hook, line and sinker. They repeated it endlessly too.

It is fairly obvious Johnson is putting the Conservative Party interests ahead of delivering a genuine Brexit. He suddenly and inexplicably called off the filibuster on No Deal and immediately Remain were calling the shots. He may hope to blame Labour for destroying the chance to leave on October 31 but many will not accept this. He failed in his big promise and feeble excuses will not do.

“The BBC claimed this is not the way things are supposed to be done” Really.
They should refund all our licence fees since day one, that is the way things should be done. What a disgusting outfit! Have they paid all the fines imposed on them by courts yet?

Very well said Peter. Boris has let us all down. All bluster again. We’ve heard it all before and I have now made up my mind who I am voting for.. The one party that has always promised to get us out. They would have negotiated better from the start. This government has totally messed up the whole process on purpose. All parties in parliament are to blame but the Conservatives have lied through their back teeth. Our host not included in that statement and a few sensible others.

Indeed but electric car sales are falling worldwide as people find out how very limited and expensive they are actually are. Anyway EV save no significant CO2. So why do governments give tax payer bribes to some usually richer virtue signallers for no reason? Sales of Tesla’s for example fell like a stone in Hong Kong when these bribes were stopped and are struggling in the US too. Only in the EU is this misguided agenda still being foolishly pushed by governments. We should wait until the technology can compete without subsidy.

I am generally in favour of free trade wherever possible, getting governments out of the way and letting companies decide where to manufacture and where not to.

‘I am generally in favour of free trade wherever possible, getting governments out of the way and letting companies decide where to manufacture and where not to.’

– Then why are you so pro Trump?!

I’m totally against governments interfering except for investing money wisely – in a smart, right-wing, capitalist way – putting up the type of investment to fertilise that ground – investment that private companies won’t initially put up themselves. For example, like in Israeli government who set up public investment funds for high tech entrepreneurs helping to fertilise Tel Aviv as a high tech hug, with public money, for private money to then come along and do the rest (with private money far outweighing public money – but public money helping to get things going).

Also, we need more public money to get kids coding – to create the software entrepreneurs of the future, and connected with that, the high tech hardware products of the future, and connected with that, high tech and digital services in general.

This country needs to focus on High Tech / Digital with the HUGE potential in bringing in $$$ to the country, as well as increasing PRODUCTIVITY, high skilled jobs, high exports (across the UK and abroad), increasing sense of patriotism in British industry, as well as diversifying our economy – not having all our eggs in the one basket.

Donald Trump is essentially an investor. Steve Jobs is a businessman in the true, comprehensive sense of the word (covering investment – in R&D but also creating products that consumers want, creating a brand that employees enjoy being part of, being involved in high tech work, organising lots of highly skilled people with lots of different skills, using lots of different skills oneself as leader, being focused on proper, long-term business plans, and so on).

I am not particularly “pro Trump” though he is surely far better than identity politics of envy Hilary Clinton. He is sound on energy policy, tax cuts, cutting red tape and the exaggerated climate alarmism scam.

Hilary Clinton is totally irrelevant. You and I are both obviously Republicans. The debate is what kind of Republicanism (and Conservatism) we want.

You’ve been beating the drum for Trump’s style of Republicanism / Conservatism from get-to. And we’re now seeing how flawed Trump’s approach his – both in terms of the economy (trade wars) and Syria (1. Giving ISIS the opportunity to spark up again 2. Setting an example that America – under Trump – can’t be trusted when it comes to military alliances, when these kinds of military alliances are important).

1. Views like this will lose The Conservatives votes amongst young and middle-aged Tories who see climate as a serious issue (whether you agree with them or not).
2. The scientific evidence largely goes against what you say
3. Because you refuse to engage, you allow the greeny extremists and anarchists to control the agenda
4. There are HUGES amount of money from high-tech entrepreneurs to make money from creating new technology for this. Whether you like it or not, there is consumer and business demand for this.

Trump appears to be largely supported by hard-right-wing religious groups who don’t believe in dinosaurs (literally). Sorry, but I think your view on climate change is becoming more and more dinosaur-like and will help to make the Conservatives extinct if we’re not careful.

– I want tax as low as you (and more). But an economy’s long-term and stable success relies on FAR MORE than tax cuts. In fact, tax cuts too extreme at one moment, can over-heat an economy – and then wham – BOOM + BUST and Labour Party get into power and ruin everything.

It’s an overly-simplistic approach in my view. Far more is needed, including clever, capitalist, right-wing investment in certain sectors, above all high-tech and digital. But ultimately it’s far more than politics. But about culture / values. And no politician can over-turn this overnight (in fact, a knee-jerk short-term approach can just make the country far worse off in the long-term).

Sorry, but I think you see everything too much in the SUBJECTIVE prism of being anti-socialism. I hate socialism (not socialists) but you’ve got to be more OBJECTIVE – like someone in business. Steve Jobs didn’t make Apple successful by focusing on being the opposite of a socialist. But rather on being objective about what makes a brand successful. Similar to the approach of that makes a country successful. It’s lots of subtle but important things that involves a long-term approach, and lots of careful planning – like in a business plan.

– Is he? How are his views better than other Republicans. How does Trump get to be such an expert on this? You might be right but please explain.

‘cutting red tape’

– I agree. But you can also go over-board, too, to the point where you undermine the judiciary, the civil service and so on – parts of our civilisation that make us advanced as opposed to a banana republic.

– This is anti-socialist ideology NOT pragmatic, objective capitalism.

For starters, ‘subsidy’ is the wrong word to use. Private enterprise needs a certain amount of public investment to OIL the works – but the FUEL behind the general investment is private not public.

Because there are certain areas of investment which private enterprise won’t enter into or can’t. Government has some role to play – at a basic level – decent roads for example. Even things like a city being boring to live in or with lots of crime and no culture puts companies off investing and setting up in that city. I’m talking now as a CAPITALIST.

Also, this touches on the question of R&D. I’m no economic expert at all, but I know R&D is important in an economy, in innovation, and productivity. Let’s look at the facts. Here are R&D (private / public) facts for major countries like UK (in terms of % of GDP).

Much talk on Question Time over whether a senior firewoman should keep her £2m pension or not when she retires (at just 50) after the dire (senior management) incompetence at Grenfell Tower. Yet the 80% who work in the private sector are largely limited to the £1m tax cap all thanks to Hammond and Osborne’s pension pot mugging.

So why Exactly do we have this blatant pension apartheid? Will the next government promise to level the pitch?

Don’t expect the spineless Tories to stand up for decent private employees by cutting their taxes. They’re only concern in protecting Labour’s client state to prevent strikes.

John sometimes can’t see the damage of his call for more public sector spending. Such a policy simply reinforces the strength of pro-Labour forces in the public sector

This naivety spells disaster for us all. if the Tories refuse to dismantle Labour’s client state and the power and advantages it confers then this client state will only continue to get bigger and wider. At that point it will be beyond reform.

I did not “blame the fire brigade for misuse of building materials” (that was largely driven by green loon religion and incompetent councils & building regulation systems). But I do blame senior fire officers for telling people to stay in their flats for many hours after it was very, very clear the fire was totally out of control.

Just one glance at the TV for a few seconds (as the fire started to climb the outside) told me it was clearly out of control, the cladding was burning & clearly flamable and everyone should try to get out asap. Many sensible fire officers on the ground could see this all too clearly as well (and this very early indeed). It was blindingly obvious to any one sensible!

If you found a fire in your kitchen – would you go upstairs to a bedroom and stay put. I wouldn’t. Unless every flat in a block is a completely fire contained unit – it is madness to advise anyone to stay. I have built a good few blocks of flats in my time. When I lived in a second floor flat years ago, I bought a long rope ladder – just in case.

“One of the reasons we need to get on with our exit from the EU is the opportunity it will give us to have our own trade policy, to lower our average tariff and to do a better job at promoting home produced food and goods.”

INDEED, but the Boris/MAY+fig leaves/handcuff deal does not really help in doing this. Just lleaving is far better and far cheaper too.

President Trump’s America first policy is designed to onshore jobs that have gone abroad, and it is, like your entire post, economically illiterate. There is no finite number of jobs that are either offshore or onshore, trade increases the number of jobs. Please go and read some Adam Smith befiore drooling this nonsense

Why didn’t you explain this to me when I had to train the offshore team replacing my job under threat of losing a redundancy settlement. I would have felt so much better about it.

Even then the multinational I worked for declared bankruptcy and didn’t pay anything, the UK government letting them off the hook because internal transfer pricing enabled them to move lots of cash back to North America so they could claim they didn’t have the cash locally to pay fines for not giving sufficient notice to employees or the government, the latter being a criminal offence by the way.

Unlike money people are not fungible. It takes time and effort to rebuild a career and in many cases the options have disappeared through offshoring.

The issue is who benefits from all this and it clearly isn’t the people who invested in their in education and careers and get the dirty end of your perfect economic models.

If you live in Ohio and places in the Rust Belt you would give up reading Adam Smith.
How absurd, lost in a theory book-box. Come out of it!!!!That’s right, put your right hand on the edge of the box you are in and pull yourself to the top then jump down. It is called Planet Earth
Workers in the USA are now doing jobs producing cars that were recently built in Mexico ‘Finite jobs’indeed. Go talk to the paypacket! You have not starved, I can read that much.

The global car industry has experienced excess capacity for some years. Pressure (and incentives) to switch to electric propulsion, coupled with demonising diesel engines, has created uncertainty, caused falling sales and compounded the overcapacity problem. There will be many more factory closures by established manufacturers to accompany the reluctance of new entrants, like Dyson, to risk the huge capital outlays required to launch a new car. In five to ten years the car industry as we know it will be decimated, along with tens of thousands of jobs, courtesy of political/green dogma. But perhaps that is the intention.

Under the Boris WA we will still be renegotiating with the EU in 10years. Endless extensions as we reach the cliff edge. No agreement until we agree to a common fisheries policy joint sovereignty over Gibraltar and continuing in the CU and SM.
All the while paying vast sums annually to Brussels.
Vote Tory, get more of the same.

Stred, exactly, Boris’s WA is not a deal at all. It is capitulation as many of us thought it would be. Which is why so many people are seriously considering the Brexit party. One has to wonder if the Conservative party will end up with egg on their faces.

But to get this majority a Farage accommodation (in some seats the Tories cannot ever win) is needed. Non of the 10 traitors recently allowed back should be allowed to stand. It would soil the party’s image even further. Good riddance to Morgan, Hammond Sandbatch and the rest they were never Conservatives.

It’s a pity we didn’t get up this morning free from the dreaded Eu, I saw yesterday Corbyn offering the earth again with free students tuition fees again, scraping universal credit and going back to getting money for nothing for the lazy I cannot be bothered to work for a living, and to top it all saying he would get a deal within 6 months, what by staying in a custom union and single market of course the Eu would be ok with that, then saying he would put it back to the people, do you want this deal or remain what bloody choice is that ,talk about a rigged ballot, but beings as Corbyn wants to take us back to the 60-70s a rigged ballot isn’t nothing new to the Labour Party/Unions

If I could ride the benefits bandwagon, with my circumstances, I could take home £36K per annum doing a minimum wage job locally and reclaim my three hour daily commute, give up departmental responsibility and leave work at work. What’s not to like?

Mick
I do sometimes wonder if many are aware of the huge, crazy benefits that are/have been available?
OK feed the poor etc but free laptops? Taxi fares? Free admissions and half price for companion? ( Maybe some benefits have been modified but for years they were that generous!).
Housing benefit was probably the most pernicious but the elite soon woke up to the implications of that and reduced it to make certain the “ reserved” areas were not affordable.
Think what tax payers have gone without ( holidays, new cars, new clothes etc etc) in order to fund the luxurious lifestyle of those on benefits.
Work…struggle…pay your taxes x 1000000..go without…die.
Or maybe do the sensible thing???

If we get a clear majority Conservative government after 12 December that arranges our tax regime to attract investment from overseas, and we have a clear policy on what we wish to encourage in terms of manufacture we could avoid the downside of current globalisation problems.

The Corbyn speach of yesterday was the very antithesis of the above. An Alice in Wonderland wish list guaranteed to destroy the UK economy and all who sail in it. I suspect the majority of traditional Labour voters will see it as the Marxist rant it was. It is encumbent on Conservative candidates to destroy it on the ground and the party to destroy it at a national level. Corbyn’s and colleagues careers have provided all the material you need for such destruction. He has already demonised many, return it in spades from his past associations, statements, and a wealth of photographic evidence. The material is there go forth and destroy.

We won’t have our own trade policy whilst parked in the Transition Period of the WA, which a witless Parliament and civil service with no idea how to formulate a trade policy, will extend endlessly. The EU will continue to dip their cup in the UK’s finances, with no mechanism to appeal.
Better that Boris is denied his majority.

Our desire for more stuff has driven globalisation. To have more stuff, rather than a few well selected, quality items that last, it has been necessary to seek out cheap labour without craftsmanship.

We do not need a new tumble dryer every few years, the control panel changes but the function of drying remains the same. Similarly with washing machines, microwaves, kettles and dishwashers. Other “labour saving” gadgets fill many houses.

Clothes are now throw away whereas before even a pair of socks was carefully earned to prolong its life.

There is a dichotomy between globalisation and living standards and another between globalisation and environmental concerns.

The idea of globalism is purely for the benefit of huge business organisations, purely for massive profit, but with no allegiance to any country.

Of course it’s going to be bad for the individual countries, and individual people. It was obvious it was going to be ever thus.

Which is why we have the ‘global warming’ scam, it’s to force us to buy electric cars, change the way we heat our homes etc…plus it gives these huge conglomerates a huge amount of control over everyone, everywhere!

This helps in their quest for “One Nation” ie one world Nation controlled by big business…and I guess ultimately one government and all the trappings. The idea has been toyed with for nigh on a hundred years.

So I think, “good on yer!” To Trump and if we ever break free from the controlling EU, to us too!

Tariffs and trade barriers are being set up between China, The US, etc etc because of a wreckers charter been followed by this US President in the main. Then your point- for there being a new economic nationalism abroad I would read new political nationalism abroad and where it will all end I have no idea- probably in tears- like in 1945.

For years you have been talking up Globalisation as the way forward so that when we are free of the dreaded EU we will be able to set up our own new trade deals with countries globally and far far away but today you say that this is not such a good idea- you say “there is a rival school of thought to globalisation”- yes indeed it is called the EU- right on our very doorstep – except you cannot see it

When signing up to the EEC/EU we committed to “shopping” at one store. This has given businesses the vehicle to cheapen production and exploit outdated tax laws. The true cost of production (pollution, wear/tear on infrastructure, etc) has been hidden and/or transferred to taxpayers by using the entire European continent as a huge production line.

We’ve put all our eggs in one basket when it’s clear healthy competition promotes innovation and excellence and a diverse economy provides growth and stability. I wholeheartedly support your views, Sir John, and would certainly welcome a policy framework supporting increased home production, preferrably with a strong bias (at this stage) towards our own business community so we can reap the rewards of our investment. I’m sure Mr Gove’s work has already identified many weak areas ripe for exploitation!

Because of poor national accounting standards, it makes profits for a steel manufacturer to close a plant in Wales and move production to Korea. They continue to sell steel in the U.K. but pay no wages here. All of the cost of supporting the steelworkers and employees in suppliers and all their families falls on the U.K. taxpayer.

We need a job equaliser based on a calculation of U.K. GDP divided by the number of jobs needed. Firms that have lots of jobs in the U.K. relative to their turnover will receive a job premium. Firms that have few jobs in the U.K. relative to their U.K. turnover will pay a job levy. The rates of premium and levy to be calculated so that the scheme is self-funding. The Inland Revenue already collects the data on number of U.K. employees and U.K. turnover so the administrative cost is negligible.

When we talk of tariffs being bad for trade or otherwise, I think that there is a strong argument for applying a Labour tariff. That is, if an item is made using sweatshop labour it should attract a punitive tariff.

All businesses exist purely as a result of having customers. A business grows by satisfying customer needs, being better at than others and innovating further to attract more custom.

The lazy management syndrome is arrived at from the lack of everything above and the thinking then turns to short cuts. Oh, look company ‘A’ is growing and getting customers, lets buy them out to give us a bigger base and stop them competing with us down the line.
The consumer then pays more as a possible competitor is removed.

The other lazy step, is as you say with Ford moving to Mexico and Jaguar Land Rover to Slovakia. They move because the Governments in those areas subsidizes industry in order to gain a competitive edge. In some instances, the labour is cheaper elsewhere. The irony with JLR it is us the UK taxpayer via our contributions to the EU that is paying to lose production from the UK.

It is understandable that a Country should subsidize production for home consumption from a security perspective. But, as soon as subsidized production gets exported that is a country trying to undermine world markets – in effect weaponizing trade.

The term Free Trade gets abused and confused. Our markets exist as the result of the prosperity of our people. But if a foreign subsidized producer believes that they can sell into an area and not contribute to the taxes of that area on equal terms with the indigenous producers they have got it wrong.

The Freedom to Trade is about everyone being on an equal footing, in terms of taxes, subsidies, standards etc. Something the protectionist EU doesn’t believe in or accept.

How close to maximum production per acre is our farming industry? This is vital as I see so many acres of farmland in my area currently disappearing under bricks and mortar and also worrying plans, both locally and nationally, to massively increase this loss of productive farm land.

Building to house a growing population being driven in part by people arriving from outside of this country, requires land, a lot of land. People need to be fed and housed and so we have the situation of a burgeoning population increasing demand for food and food producing land disappearing to provide housing for the burgeoning population. This is unsustainable over time, more so if we wish to produce much more of our own food as you propose.

I bet none of you that bothered about it when you need to upgrade your Chinese made model phone handset or when you need a new South Korean made TV or German manufactured appliance.

The reality is that, for all its faults, globalisation is the least bad solution we have come up with. The world repeatedly tries isolationism – that always ended in significant conflict.

Are there problems with globalisation? Sure. It can lead to grotesque wealth inequality. But the fact is the world is actually wealthier, healthier and more educated that it has ever been. This is the safest time to ever have been alive.

Rage against globalisation all you like. But make sure you have a better alternative in mind. And none of you do.

Well at last its starting to dawn on you that all the essential 21st century products you mention are made OUTSIDE the EU in countries that DO NOT have FTA’s with the EU. Thats what we’ve been saying we need to get out of the little EU backwater and trade globally . Theres nothing wrong with interconnected global trade what IS objected to is centralised , global , top down political control

Each day Andy realises more and more that he’s on the wrong side of the future

I can only comment on the company that I work at that has moved some assembly to the US market due to Trumps policies, we pulled our sales office out of China long before he became president.

Regarding globalisation the role of the most common transportation fuel, oil is often ignored.

It is not that it is running out, it has always been running out, but since the 2000’s it has been getting more expensive. Today it bounces around 60-70 dollars a barrel and looks to go higher. This must decrease globalisation, perhaps the tariffs imposed today are more an a reaction to that and attempting to keep local production from falling further.

The remainers’ belief that it is better for the UK to belong to the EU’s CU is wrong.

It is perfectly obvious that it is far better to be able to negotiate one’s own trade deal to fit with one’s own type of economy rather than be governed by a deal 27 or more other countries may want, many of whom have completely different institutions, economies and climates to ours.

Example :

There is talk at the moment of our NHS being traded away/sold in a trade deal with the US.

It is obvious that no UK PM/party, who are accountable to the UK electorate, would dare sell/trade away our NHS to US corporates. They would be out of office at the next election, if it even took that long.

On the other hand it is perfectly feasible that the EU would be prepared to do this in order to get cheaper tariffs on German cars and French food and wine and could do this with impunity as they are unelected and un-removable by the UK electorate.

JR will not be promoting anything to do with Farage as a one-member political party. CCHQ has put the word out to Constituencies to give the “order of the boot” to any PPC that voices publically, sympathy for Farage thinking.

The Brexit Party is a “task and finish” set up. Its mission to force a “no-deal” Brexit and then walk away and leave someone else to repair the economic damage this one member (Farage; the rest are just “supporters”) party will have done to the UK.

Localisation – I see it as an essential reversion. Globalisation doesn’t work as it is being done – it might work if all economies were equal, but they’re not and we have to deal with the world as it is, not as we would like it to be.

The problem with old-style localisation is that large manufacturers had a single supplier for each component or assembly. This leads to powerful market players, who inevitably abuse their position. Eventually, to break the monopoly, the manufacturer was obliged to look abroad – or had the foreign suppliers offering them much lower prices and often higher quality as well.

Instead there needs to be a number of local suppliers of each part, winning more business according to their product’s cost and quality.

However, it is unlikely that governments can make companies do sensible things – this is not an area where government can sensibly legislate. The problem is in the quality of our leaders, once again. We bemoan the quality of MPs because their failings are very obvious, but the failings of so-called business leaders are not so clearly identified.

What did we think was going to happen when the “can’t dos” took over the world with their management-speak mantra “You don’t need to know to manage”?

I’ve never seen a good argument for protectionism and I don’t think you’ve made one here. On the other hand Bastiat’s clear arguments against it still ring down the centuries. Private companies are (or should be) capable of factoring in transport and other costs before choosing where to source their supply chain from. There is a also a very clear reality in economic theory that tells us that protectionism does not “onshore jobs”. (This is separate to the argument about migrant labour, since it is impossible to migrate labour without migrating persons, which inflicts massive externalities onto the host society and its economy e.g. social services, healthcare, etc).

I’m a big fan of yours in general John but it feels that the whole Tory Party is continuing to drive Left (despite the ludicrous claims it is “far right”) and it would be nice to hope that Brexit will be a fresh start for this country with a return to classical liberal economic principles (free trade and free markets) as well as socially liberal policies in the true sense of the word (less interfering in private life by the State) but instead we have a party which is currently promising massive spending and the dreary prodnosery of banning coffee stirrers and cotton buds.

In fact it is very hard to find anything we are going to do different after Brexit. Everyone seems to be falling over themselves to claim that we will out-EU the EU. But one thing we can be confident of is that a “Britain First” economic policy of trade warfare will not make the country a better, wealthier place. I’m not a Trumpophobe, but his economic protectionism is woefully wrong headed. We must not copy it. If other nations wish to harm their own consumers that is their choice, we should instead prove the benefits of the free trade path by benefiting from their self harm through open trade policies.

Of course why the crazy stability and growth pact was introduced in the EU.

Only having 3% government budget deficits dampens down demand for imports as the non government sectors do not have enough money to buy them.

To try and make everybody export their way to growth. Pure madness.

The madness continues. We hear that nations with current account surpluses are more robust and that current account deficits reduce potential growth because the increasing foreign ownership reduces profit retention and hence investment.

That claim is unsustainable.

First, there was a denial that exports are a cost and imports are a benefit. That should be undeniable.

For an economy as a whole, imports represent a real benefit while exports are a real cost.

Exports mean that we have to give something real to foreigners that we could use ourselves – that is obviously an opportunity cost.

Imports represent foreigners giving us something real that they could use themselves but which we benefit from having. The opportunity cost is all theirs!

Thus, net imports means that a nation gets to enjoy a higher material living standard by consuming more goods and services than it produces for foreign consumption.

Further, even if a growing trade deficit is accompanied by currency depreciation, the real terms of trade are moving in favour of the trade deficit nation (its net imports are growing so that it is exporting relatively fewer goods relative to its imports).

German workers, for example, give up hours of labour time, and utilise all sorts of raw materials to make motor cars and motor cycles, which they then put on ships and send elsewhere for the enjoyment of others. That is a real cost to Germany because it could use those productive resources for themselves.

So, on balance, if we can persuade foreigners to send us more ships and airplanes filled with things for us, than we have to send them in return (net export deficit) then that has to be a net benefit to us in real terms.

How can we have a situation where foreigners are giving up more real things than they get from us (in a macroeconomic sense)?

The answer lies in the fact that our current account deficit ‘“finances’ their desire to accumulate net financial claims denominated in UK pounds.

Think about that carefully. The standard conception is exactly the opposite – that the foreigners finance our profligate spending patterns.

JR – As the Number One priority, just ensure the conservative manifesto has Leaving the EU with NO deals, NO payments and NO sly tentacles attached. When we are OUT we shall have our own sovreignty and we will be FREE to negotiate our own deals with NO interference.

Following this we can then concentrate on:
a) A proper immigration policy. The population is exploding and services throughout are OVERLOADED.
b) Ridding the NHS of the layers of useless mangement and concentrating on front line services.
c) Ridding the Police and Armed Forces of the ridiculous Common Purpose and LBGT crap.
We need a Police FORCE with common sense and zero tolerance to fight CRIME. Reinstate Stop and Search.
d) Getting out of the Globalist Climate Paris accord and Global Warming BS (thank you Brown) and ensuring we have a realistic Energy policy by building Power stations.
(Wind farms are useless for the population but profitable for the land owners.)
e) Getting out of the Globalist UN Immigration programe (thank you MAY)
f) Cutting taxes and reorganising the overblown tax system (thank you Brown)
g) Improving the benefits for pensioners.
h) Changing the Left Wing Curriculum of school education and a clear out the Comunisitic N.U.T.
j) No free social payments until one has been resident 5 years.
k) NO state funding for the BBC.
m) Cancel HS2 immediately.
………..a few pointer but there are many others.

The EU is disintegrating before ours eyes and still peple want to be part of it?

Globalization has surely been a disaster. We have outsourced production to countries like China – which are building 2 coal fired power stations a week. Our country has gone from being a country where young working people – in the 1960s and 1970s – could afford a house, had a steady, well-paid job and a decent pension to look forward to.

When you look at the future young people face today, one can only conclude that globalization has caused a race to the bottom. We have transformed to a low paid service economy with huge house prices and zero hours contracts.

Few people in the 60s and 70s could afford a house or had a good pension.
And s for steady well paid jobs, unemployment was much higher than today and standards of living were much lower than today.

About John Redwood

John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.